Each day brings with it an opportunity to learn and share.
So today I will share my view on why asking an investor to sign an NDA before sharing your deck is stupid, ridiculous and foolhardy – this blog post has been inspired from events that took place mid-day today.
First, let us all be clear that the strength of a venture is in its execution and not the ideation. I cannot remember where I read or heard this but I repeat it a lot (much to the chagrin of my team),
“Ideas are a dime a dozen and you’re still overpaying for it.”
Second, to all my “NDA required” founder friends: Is your idea so simple that anyone who reads your business plan can copy it, create the same result as you would have and make all the promised multiples? Either you’re in the wrong business OR you aren’t someone who believes in his/her execution skills. Neither of those impressions creates a positive aura for you in the mind of the investor.
Third, if I did in my wildest dreams sign an NDA: I would ask the founder to make it a dual-responsibility NDA wherein any advice I have given to the founder or venture can be implemented only and only if my investment is taken. If my advice is implemented without my investment then I should be given the upside that I have missed.
Does that sound ridiculous?
Well so does asking for an NDA to see plan for a business so easy that anyone can do it.
This is not to say that a founder should never request an NDA.
An NDA can be requested if (and when) things move into the due diligence stage and indepth information is required about the venture by the investor OR in the very rare case that your product/service is so unique that it can be protected by an IP. Even in the latter case the Indian IP laws (to the best of my knowledge) do not protect you if you do not move beyond the ideation stage.
Therefore founders, please, please, please… do not waste your time and mine by asking for NDAs to see your business plans – I won’t sign them!